Gujarat High Court
M/S H K Infracon Private Limted vs Mamlatdar And Executive Magistrate on 24 February, 2025
Author: Nikhil S. Kariel
Bench: Nikhil S. Kariel
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 435 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
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Approved for Reporting Yes No
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M/S H K INFRACON PRIVATE LIMTED
Versus
MAMLATDAR AND EXECUTIVE MAGISTRATE & ORS.
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Appearance:
MR MI HAVA(348) for the Petitioner(s) No. 1
MRS NASRIN N SHAIKH(2451) for the Petitioner(s) No. 1
MR NIKUNJ KANARA ASSTT. GOVERNMENT PLEADER for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
Date : 24/02/2025
ORAL JUDGMENT
1. Heard learned advocate Mr.M.I.Hava along with learned advocate
Ms.Nasrin Shaikh on behalf of the petitioner and learned Assistant
Government Pleader Mr.Nikunj Kanara on behalf of the respondent -
State.
2. By way of this petition, the petitioner has sought for the following
reliefs:-
"(i) That a writ of mandamus or certiorari or any other writ
or order may please be issued, quashing and setting aside the
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Notice dated 26/27.11.2024 being Annexure D issued by the
Respondent No.1 - Mamlatdar and Award dated 05.01.2024
being Annexure A issued by the Respondent No.3 MSME
Council, M.P. being ultravires, illegal, nullity and without
jurisdiction;
(ii)That during the pendency of the petition herein, the operation,
execution and enforcement of the Notice dated 26/27.11.2024
being Annexure D issued by the Respondent No.1 - Mamlatdar
and Award dated 05.01.2024 being Annexure A issued by the
Respondent No.3 MSME Council, M.P., may please be stayed;
(iii) Ad. interim relief in terms of paragraph (ii) above may
please be granted;
(iv) Such other order or orders as in the interest of justice
this Hon'ble Court may deem fit and proper may please be
made."
3. By way of this petition, the petitioner - Company seeks to challenge
notice dated 27.11.2024 issued by the Mamlatdar, Mehsana under Section
152 of the Gujarat Land Revenue Code inter alia informing the petitioner
to deposit an amount of Rs.92,59,610/- along with Rs.13,62,507/-, failing
which, action for recovery of the amount as revenue dues would be
initiated. It would appear that the petitioner also challenges an Arbitration
Award dated 05.01.2024 passed by the respondent no.3 - MSME Council,
Madhya Pradesh whereby the Council has awarded the above sum i.e.
Rs.92,59,610/- along with interest calculated at Rs.13,62,507/- to the
respondent no.2.
3.1. It is the case of the petitioner that a Tender had been floated by the
M.P. Police Housing and Infrastructure Development Corporation Limited,
Jabalpur for certain construction and whereas, the estimated contract valued
was Rs.16,360.20/- Lakhs. The petitioner had been awarded work contract
with regard to the said tender and whereas, while the petitioner had engaged
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respondent no.2 as sub-contractor, certain disputes had been arisen which
had led to the respondent no.2 filing an application before the MSME
Council claiming an outstanding amount of Rs.92,59,610/- with interest at
the rate of Rs.13,62,660/-.
3.2. It appears that the MSME Council had originally initiated conciliation
proceedings under Section 18(2) of the MSME Act and whereas, no
settlement proposal had been submitted by the petitioner in the conciliation
proceedings. It would further appear that on the conciliation proceedings
not resulting in an amicable settlement, it is the case of the petitioner that
the MSME Council had, without conducting any arbitration proceedings,
passed an award without following any procedure whatsoever. The
respondent no.2 had whereafter approached the MSME Council which had
written to the Collector, Bhopal to seek assistance of the Collector, Mehsana
for recovery of the amount as arrears of the land revenue and whereas, it is
in this context that the notice referred to hereinabove under Section 152 of
the Land Revenue Code had been issued by the Mamlatdar, Mehsana (City)
to the petitioner asking the petitioner to deposit the amount in question
failing which appropriate proceedings for recovering the amount as dues of
land revenue shall be taken.
4. Learned advocate Mr.M.I.Hava on behalf of the petitioner would
submit that award in question is a nullity in the eyes of law and whereas, in
this regard, learned advocate would refer to the decision of the Hon'ble
Supreme Court in case of Jharkhand Urja Vikas Nigam Limited vs. State of
Rajasthan, reported in 2021(19) SCC 206.
4.1. Learned advocate would submit that the Hon'ble Supreme Court has
explained the procedure under the MSMED Act as regards conciliation and
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arbitration and whereas, it is submitted that upon the conciliation
proceedings failing, the Facilitation Council ought to have recorded failure
of conciliation and proceeded to initiate arbitration proceedings in
accordance with the provisions of the Arbitration and Conciliation Act,
1996. It is submitted that the Council, in the instant case, had committed a
gross error in passing award immediately upon the conciliation proceedings
between the parties not resulting in a settlement.
4.2. Learned advocate would submit that the award, as per the decision of
the Hon'ble Supreme Court, is a nullity. It is further submitted that an
award which is a nullity could be questioned wherever and whenever it is
sought to be enforced or relied upon, even at the stage of execution and
even in collateral proceedings. Learned advocate would submit that the
award in question being a nullity, is challenged before this Court in a
collateral proceedings whereby the award is sought to be executed by the
revenue authorities. Learned advocate, in support of his submissions, would
rely upon decision of the Hon'ble Supreme Court in case of Hindustan Zinc
Limited (HZL) vs. Ajmer Vidyut Vitran Nigam Limited, reported in 2019
(17) SCC 82. Learned advocate would submit that since the award is a
nullity, therefore, this Court may quash and set aside the same and
consequently quash and set aside the impugned notice issued under Section
152 of the Gujarat Land Revenue Code.
5. As against the submissions made by learned advocate Mr.Hava, the
present petition is vehemently opposed by learned AGP Mr.Nikunj Kanara
on behalf of the respondent - State.
5.1. Learned AGP would submit that the present petition may not be
entertained by this Court since this Court would lack territorial jurisdiction
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to entertain the writ petition and whereas, it is further submitted that the
petitioner is requesting this Court to interfere on the ground that the order
of the MSME Council is a nullity and whereas, by seeking intervention of
this Court, when no part of cause of action had arisen within the territorial
jurisdiction of this Court, the petitioner is in fact requesting this Court to
commit the same mistake as alleged to have been committed by the MSME
Council i.e. to pass an order in an issue where there is an apparent absence
of jurisdiction.
5.2. Learned AGP in this regard rely upon Article 226(2) of the
Constitution of India whereby, according to learned AGP, a High Court has
been empowered to exercise jurisdiction in relation to territories within
which the cause of action, wholly or in part, has arisen.
5.3. Learned AGP would also rely upon decision of the Hon'ble Supreme
Court in case of Kusum Ingots and Alloys Limited vs. Union of India and
Another, reported in 2004 (6) SCC 254 and would submit that the Hon'ble
Supreme Court has inter alia laid down the law that a High Court would
exercise jurisdiction under Article 226 of the Constitution of India only if it
has a requisite territorial jurisdiction and some part of the cause of action
has arisen within the jurisdiction of the Court.
5.4. Learned AGP would submit that since the cause of action has not
arisen within the territorial jurisdiction of this Court, therefore, this Court
may not entertain the present writ petition.
6. Heard learned Counsels for the respective parties and perused the
documents on record.
6.1. To this Court, it would appear that the primary question would be
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whether this Court would have territorial jurisdiction to entertain the
present writ petition and whereas, depending upon the answer to the said
question, the issue on merits would be dealt with by this Court.
6.2. At the outset, this Court seeks to refer to Article 214 of the
Constitution of India which inter alia lays down that there shall be a High
Court for each State. Going further, Article 226(2), which has been relied
upon by learned AGP, inter alia lays down that the power to issue writ,
orders or directions could be exercised by any High Court exercising the
jurisdiction in relation to the territories within which the cause of action,
wholly or in part, has arisen. The Article further clarifies that such power
could be exercised even if the Government or Authorities etc. are not within
the territory of the High Court.
6.3. At this stage, this Court seeks to rely upon the decision of the
Hon'ble Supreme Court in case of Kusum Ingots and Alloys Limited (supra)
where the Hon'ble Supreme Court has inter alia explained the term 'cause of
action' in relation to Article 226(2) of the Constitution of India. Paragraphs
no.6 and 10 of the decision being relevant for the present purpose, is quoted
hereinbelow for benefit:-
"6. Cause of action implies a right to sue. The material facts
which are imperative for the suitor to allege and prove constitutes
the cause of action. Cause of action is not defined in any statute.
It has, however, been judicially interpreted inter alia to mean that
every fact which would be necessary for the plaintiff to prove, if
traversed, in order to support his right to the judgment of the
Court. Negatively put, it would mean that everything which, if
not proved, gives the defendant an immediate right to judgment,
would be part of cause of action. Its importance is beyond any
doubt. For every action, there has to be a cause of action, if not,
the plaint or the writ petition, as the case may be, shall be rejected
summarily.
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(Emphasis supplied)
10. Keeping in view the expressions used is Clause (2) of
Article 226 of the Constitution of India, indisputably even if a
small fraction of cause of action accrues within the jurisdiction of
the Court, the Court will have jurisdiction in the matter.""
6.4. The Hon'ble Supreme Court while explaining the concept of cause of
action, has inter alia laid down that having a cause of action would imply
that the party has a right to sue. As per the law laid down by the Hon'ble
Supreme Court, cause of action would mean every fact which would be
necessary for the plaintiff to prove in order to get a judgment from the
Court. The Hon'ble Supreme Court has also explained the concept
negatively i.e. from the perspective of the defendant, wherein it is explained
that cause of action would mean any fact which, if not proved, would give a
defendant an immediate right to judgment. Furthermore, it would appear as
per the law laid down by the Hon'ble Apex Court for this Court to exercise
jurisdiction, the petitioner would have to prove that even a small fraction of
cause of action had accrued within the jurisdiction of this Court
6.5. Now, considered from the perspective of the law laid down by the
Hon'ble Supreme Court, it would appear that the fact which the petitioner
would be required to prove to receive a judgment is whether the award
passed by the MSME Council is a nullity or not. Only upon that fact being
proved, would the petitioner be entitled to a judgment. Conversely, if the
petitioner were not able to prove that the award is a nullity, then the
defendant i.e. respondent no.2 would be entitled to a judgment in his
favour. The MSME Council referred to is the Madhya Pradesh Micro and
Small Enterprises Facilitation Council i.e. respondent no.3 herein, which is
an authority established in and for the State of Madhya Pradesh. Moving on
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further, it would appear that the contract was awarded in Madhya Pradesh,
the petitioner had engaged respondent no.2 as a sub-contractor for the
contract awarded and the respondent no.2 had carried out the work within
the State of Madhya Pradesh. The dispute had arisen with regard to work
allegedly done by the respondent no.2 within the Sate of Madhya Pradesh
and consequently the Micro and Small Enterprises Facilitation Council,
Madhya Pradesh had been approached by the respondent no.2. Thus, to this
Court, it would appear that the entire facts, which the petitioner would be
required to prove, had happened outside the territorial jurisdiction of the
State of Gujarat, rather it would clearly appear that no part of the cause of
action has accrued within the jurisdiction of this Court for this Court to
issue any writ, order or direction.
6.6. Insofar as the notice issued by the Mamlatdar, Mehsana is concerned,
while it is true that the same is issued by an authority within the territorial
jurisdiction of this Court, yet, the notice by itself would not prejudice the
present petitioner. The fact that the notice seeks to execute an award by the
MSME Council, would be the material aspect and whereas, until and unless
the award by the Council had not been interfered with by a competent
Court, no fault could be found with the revenue authorities in having issued
the impugned notice to the petitioner. Thus, it would appear that for this
Court to exercise jurisdiction as per Article 226(2) of the Constitution of
India, as explained in Kusum Ingots and Alloys Limited (supra), some part
even a small fraction of the cause of action should have accrued within the
territorial jurisdiction of this Court. Having regard to the above discussion,
it would be apparent that no part of the cause of action has arisen within the
territorial jurisdiction of Gujarat State and hence, it would be clear that this
Court would not have any jurisdiction to entertain this writ.
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6.7. Now, coming to the decision as relied upon by learned advocate for
the petitioner i.e. Hindustan Zinc Limited (HZL) (supra), the Hon'ble
Supreme Court had in the said decision reiterated law laid down by the
Hon'ble Supreme Court in case of Kiran Singh and Others vs. Chaman
Paswan and Others, reported in 1995 (1) SCR 117. Paragraph no.17 of the
decision of Hindustan Zinc Limited (HZL) (supra) is reproduced
hereinbelow for benefit, more particularly the law laid down in Kiran Singh
(supra) being reiterated:-
"17. We are of the view that it is settled law that if there is an
inherent lack of jurisdiction, the plea can be taken up at any stage
and also in collateral proceedings.This was held by this Court in
Kiran Singh and Others v. Chaman Paswan and Others'(1955) 1
SCR 117 as follows:-
"6. ... It is a fundamental principle well-established that a
decree passed by a Court without jurisdiction is a nullity,
and that its invalidity could be set up whenever and
wherever it is sought to be enforced or relied upon, even at
the stage of execution and even in collateral proceedings. A
defect of jurisdiction, whether it is pecuniary or territorial,
or whether it is in respect of the subject-matter of the
action, strikes at the very authority of the Court to pass any
decree, and such a defect cannot be cured even by consent
of parties. If the question now under consideration fell to be
determined only on the application of general principles
governing the matter, there can be no doubt that the
District Court of Monghyr was coram non judice, and that
its judgment and decree would be nullities.""
6.8. The Hon'ble Supreme Court has inter alia laid down the law that an
issue with regard to lack of jurisdiction can be taken up at any stage of a
proceeding and also in a collateral proceedings. Importantly, it is explained
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by the Hon'ble Supreme Court that a decree passed by a Court without
jurisdiction would be a nullity and plea of invalidity could be resorted to
whenever and wherever such an order or decree is sought to be enforced or
relied upon even at the stage of execution and collateral proceedings.
Having observed as thus, the Hon'ble Supreme Court further explains that a
defect of jurisdiction, territorial as in the present case, strikes at the very
authority of the Court to pass any decree and such defect cannot be cured
even by consent of the parties. Reading the observations of the Hon'ble
Supreme Court as a whole, while it would appear that invalidity of an order
could be raised as a challenge or as a defence whenever it is sought to be
enforced or executed and even in collateral proceedings, but, subject to
condition that the Court concerned should have jurisdiction to entertain
such a plea. The law laid down by the Hon'ble Supreme Court could not be
permitted to be interpreted by the petitioner to mean that challenge to an
order which is a nullity could be raised in collateral proceedings even when
the Court concerned would be lacking in jurisdiction to entertain the same.
To this Court, it would appear that accepting the contention of the
petitioner would virtually mean that while the petitioner could challenge an
order or a decree in collateral proceedings on the ground that the order or
decree was a nullity since there was an inherent lack of jurisdiction and such
a challenge could be mounted before any Court, irrespective of whether the
Court would have the jurisdiction to decide such an issue. Such an
incongruous interpretation cannot be accepted.
6.9. Thus, to this Court, it would be apparent from the observations of
the Hon'ble Supreme Court where the Hon'ble Supreme Court emphasizes
that a defect of jurisdiction strikes at the very authority of the Court to pass
an order, therefore, it would undoubtedly mean that while any order or
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decree passed by a Court without jurisdiction is a nullity and the aspect of
nullity could be raised in any proceedings, but, subject to the condition that
the Court which hears the plea, had a requisite jurisdiction to consider the
same.
6.10. Co-relating the facts with the legal principles enumerated
hereinabove, it would appear to this Court that whether or not, the award by
the MSME Council, Madhya Pradesh was a nullity or not could be raised
even in proceedings of execution, yet, it would not be competent for this
Court to examine the said legal issue since no cause of action had arisen
within the jurisdiction of this Court for this Court to exercise jurisdiction in
the present case.
7. Having regard to the discussion, observations and conclusions arrived
at hereinabove, more particularly, since this Court having held that no part
of cause of action has arisen within the jurisdiction of this Court for this
Court to exercise jurisdiction, therefore, as per the law laid down by the
Hon'ble Supreme Court at paragraph no. 6 (as emphasized) of the Kusum
Ingots and Alloys Limited (supra), the present writ petition is hereby
rejected summarily.
(NIKHIL S. KARIEL,J)
Y.N. VYAS
After pronouncement of this judgment of this Court, learned
advocate Ms. Nasrin Shaikh for learned advocate Mr. M.I. Hava has
requested for continuing interim protection for a period of four weeks.
Considering that the interim order dated 22.01.2025 was granted as a
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purely interim arrangement, without going into merits of the matter and
since this Court has rejected substantive contentions of the petitioner as
above, the request for continuing the interim relief is rejected.
(NIKHIL S. KARIEL,J)
Y.N. VYAS
